Pharma Integrates 2013 - Beyond Account Management

Beyond Account Management. Leveraging Pharma supply-base capabilities to co-create value in the broader Healthcare sector
A presentation at Pharma Integrates 2013, an event for senior management in the pharmaceutical industry created and run by Life Sciences Index.

17.
Why are value based relationships so
difficult for Big Pharma?
Focus on Cost Savings - “We just can’t seem to escape this without
recognising that what we want to achieve is a route to lower costs, not
only a route to lower prices”
Metrics management – “Of course we need to measure the
performance of our most important suppliers, but this “crowds out” a much
more important dialogue”
Control vs. Collaboration – “Our systems do not encourage suppliers
to evaluate us as customers of choice who actively are seeking innovation
and co-created value”
No Priority / No time – “Our own buyers often have neither the time
nor the knowledge to manage a deeper discussion with our most
important suppliers”
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25.
Ex 1: Gaining visibility
Providing visibility & solid planning horizon
§ How do we achieve reliable and sustainable supply?
§ How can we simplify translation of demand into supply?
§ How to reduce lead time between end-customer and supplier?
§ How to deal with costs of idle capacity?
Roche
Volume
Traditional
Peak
outsourcing
Peak inhouse
Base-load
outsource
Base-load
In house
Time
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27.
CMO Perspective on the Roche
outsourcing model
§ Very unique and advanced model
§ Allows maximum planning at CMO
§ Will required open discussions upfront as Roche
also need to have a minimum quantity to keep knowhow in house
§ Can´t be seen as tactical outsourcing and is one of
the best examples of a strategic partnership
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31.
Ex 2: Achieving agility
C o n t r i b u t i n g factors
Additional complexity
§ Not single or dual sourced, but
sometimes up to 5 vendors
§ How do you keep them busy
(profitable) and trained (ready)
§ offering a base load that is steady
(same product or same
technology)
§ prioritize for 9 months one or the
other product
§ leveraging inventory run down
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33.
Case Study B: Ensuring reliability
of supply
Customer need
• Maintenance of 99% in-stock position for more than 500 SKUs
• Assurance of zero quality and regulatory issues
What we did?
• Ensured alignment of all stakeholders to the expectations and needs of customer through
daily meetings – clear shortening of communications paths
• Oriented internal supply chain towards customer’s needs and give customer full insight
views
• Established collective responsibility and ownership for actions
• Provided monthly monitoring of performance and transparent result sharing with the
client
Value to the customer
• Consistent achievement in-stock performance above target for more than 2 years and
consequently supply assurance to customer
• Trusted supplier for the customer – among the top 2 suppliers for Europe
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34.
Pharma 3.0 – a New Paradigm
¡ With this kind of changes we need to rethink about our supply
chain and outsourcing models:
§ Should a CMO offer “just the manufacturing” or should a CMO get an
integrated part of the new more complex supply chain by adding additional
value to the supply chain?
§ Can Pharma Companies and CMOs achieve the new targets with tactical
models or will be strategic partnerships the required model?
§ Should Pharma Companies not define in depth the reasons for outsourcing
within their RFQs? There should be a move away from lowest price to best
value but this can be only achieved if the CMOs will be allowed to understand
the intention for outsourcing
§ More dedicated projects/products will require more flexibility (smaller batches,
more SKUs, global supply). Are CMOs prepared for it or is there still a focus
on larger products? What are the future expectations on CMOs?
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